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New Zealand Business Demography Statistics: At February 2006
Embargoed until 10:45am  –  26 October 2006
Commentary

Introduction

Business demography statistics provide an annual snapshot (as at February) of the structure and characteristics of New Zealand businesses. Statistics are available on a range of variables, including industry, region, institutional sector, business type, size (employment levels), and degree of overseas ownership. Data can also be produced on the dynamics of businesses, by examining the entry and exit of firms (commonly referred to as births and deaths) between reference points. There is a guide for interpreting business demography statistics in the Technical notes of this release.

Total number of enterprises and geographic units

At February 2006, the number of non-farming enterprises on Statistics New Zealand's Business Frame was 346,090. The number of geographic units (business locations) corresponding to these enterprises was 378,430. These businesses engaged a total of 1.765 million employees.

When comparing February 2006 with February 2005, the number of enterprises in New Zealand increased by 3.5 percent (up 11,750). Industries showing significant growth were property and business services (up 5,900), followed by construction (up 2,320). The number of business locations increased in all regional council areas between February 2005 and February 2006.

The number of employees engaged grew 2.2 percent (up 37,500) in February 2006 compared with February 2005.

Graph, Number of Enterprises. Graph, Employee Count.

Industry statistics

Property and business services

The property and business services industry has the largest number of enterprises (124,110), representing 36 percent of all enterprises in New Zealand, as at February 2006. This industry also had the largest increase in the number of enterprises, up 5,900 or 5 percent, between February 2005 and 2006. Most of this growth (83 percent) was from non-employing enterprises.

Of the overall increase in the property and business services industry, property services contributed 52 percent. Enterprises in this industry are mainly property developers and operators, real estate agents, non-financial asset investors, and machinery and equipment hiring services.

There were approximately 221,600 employees engaged in the property and business services industry in February 2006, compared with 212,300 in February 2005 (up 9,300 or 4.4 percent). About 51 percent of this increase was in enterprises with 100 or more employees.

 Graph, Number of Enterprises in Property and Business Services.

Construction

There were 44,380 enterprises predominantly engaged in the construction industry in February 2006, an increase of 2,320 (5.5 percent) compared with February 2005. More than half of this increase was from non-employing enterprises.

The construction industry engaged approximately 115,800 employees in February 2006, up 7,700 (7 percent) from the previous year. This rise in employment numbers was shared evenly between firms involved in general construction and construction trade services.

Retail trade

The number of enterprises predominantly involved in the retail trade industry was 37,120 (up 500 or 1.4 percent) in February 2006. Firms mainly engaged in personal and household goods retailing (up 230 or 1.3 percent) contributed 45 percent of the overall increase in the number of retailers, and firms engaged in motor vehicle retailing contributed 42 percent.

The retail trade industry engaged approximately 232,300 employees in February 2006, up 6,200 (2.7 percent), when compared with February 2005. Personal and household goods retailing contributed 55 percent of this increase. Over 40 percent of all employees in the retail trade industry were employed in personal and household goods retailing.

Manufacturing

There were 22,060 enterprises predominantly engaged in manufacturing in February 2006, 230 or 1 percent more than in February 2005. Of these enterprises, 26 percent were involved in machinery and equipment manufacturing, while 16 percent were involved in metal product manufacturing.

The manufacturing industry was the largest employer in February 2006, with approximately 263,700 employees. Between February 2005 and 2006, the number of employees in manufacturing decreased by 4,500 (down 1.7 percent). Despite contributing only 7.8 percent of the total number of enterprises in the manufacturing industry, the food, beverage and tobacco industry engaged 31 percent of all manufacturing employees.

Regional statistics

Auckland region

Excluding farming, more than one-third (35 percent) of all geographic units (business locations) in New Zealand are in the Auckland region. Over one-third of all employees (34 percent) were engaged by these geographic units.

There were 132,640 geographic units in the Auckland region in February 2006, up 2.4 percent from February 2005. Industries recording significant increases in the Auckland region were property and business services (up 1,840 or 3.9 percent), followed by construction (up 370 or 2.4 percent) and retail trade (up 250 or 1.7 percent).

In February 2006, there were approximately 602,200 employees associated with businesses located in the Auckland region, up 3 percent from February 2005. The industries with large increases in employee numbers were property and business services (up 8,900 or 9.4 percent), followed by retail trade (up 1,900 or 2.7 percent), and health and community services (up 1,900 or 4 percent). The largest reduction of employees occurred in the manufacturing industry (down 900 or 1 percent).

Graph, Number of Geographic Units.  

Remainder of North Island

Excluding the Auckland region, there were 156,260 non-farming geographic units located in the remaining regions of the North Island in February 2006. This was an increase of 3.8 percent when compared with February 2005. These geographic units engaged approximately 727,100 employees in February 2006, a 2 percent increase from February 2005.

Regions showing significant increases in the number of business locations established were Wellington (up 1,370 geographic units), Waikato (up 1,080) and Bay of Plenty (up 980). In these three regions, the property and business services industry contributed most to the increase (52 percent in Wellington and 40 percent both in Waikato and Bay of Plenty).

In the Wellington region, the highest increase in employment occurred in government administration and defence (up 2,800 employees or 12.3 percent), although the number of business locations in government administration and defence in Wellington decreased by 20 (down 5.1 percent)

South Island

Excluding farming, there were 89,390 geographic units in the South Island in February 2006. This was an increase of 3,540 (4.1 percent) from February 2005. These business locations engaged approximately 433,600 employees, an increase of 5,000 (1.2 percent) when comparing February 2006 with February 2005.

In February 2006, over half of all geographic units (46,640) and employees (approximately 237,000) in the South Island were located in the Canterbury region. Compared with February 2005, Canterbury recorded increases of 1,960 geographic units and approximately 3,100 employees in February 2006. The region contributed significantly towards the overall South Island growth in geographic units (56 percent) and number of employees (62 percent).

The increases in Canterbury were mainly in property and business services, construction and retail trade. Together, these industries contributed 72 percent of the overall increase in geographic units in the region and 70 percent of the increase in the number of employees. The largest reduction of employees in Canterbury occurred in the manufacturing industry (down 1,100 or 2.7 percent).

Business type

Of the total number of enterprises in New Zealand in February 2006, 52 percent (181,320) were registered limited liability companies, 22 percent (74,460) were individual proprietorships and 13 percent (44,370) were partnerships. Of the total number of employees engaged, registered limited liability companies contributed 68 percent (approximately 1,207,000), while central government contributed 14 percent (approximately 237,500).

Graph, Total Enterprises and Total Employees.

In February 2006, most individual proprietorships were in the property and business services industry (35.5 percent), construction (19 percent) and retail (8.4 percent). Employees working for registered limited liability companies were mainly involved in the manufacturing industry (20 percent), followed by the retail trade industry (18 percent), and property and business services (15 percent).

Business size

Excluding farming, most enterprises in New Zealand (96.4 percent) had fewer than 20 employees in February 2006. However, these enterprises accounted for only 29.6 percent of all employees. Conversely, enterprises with 100 or more employees made up 0.6 percent of the total number of enterprises in New Zealand but employed 47.8 percent of the total number of employees.

In February 2006, 64 percent (219,960) of all enterprises were non-employing enterprises, up from 63 percent in February 2005. In terms of industrial activity, 47 percent of these enterprises were predominantly involved in property and business services, 12 percent in construction and 7 percent in retail trade.

Of the total growth in enterprises, to February 2006, 75 percent or 8,790 were non-employing, whereas in the year before, enterprises with one to five employees contributed most to growth, with 63 percent or 6,330.

During the year to February 2006, the strongest growth in employment (up 30,000 employees or 3.7 percent) came from businesses with 100 or more employees, followed by firms with one to five employees (up 5,300 employees or 2.9 percent). Employment in businesses engaging 50 to 99 employees decreased by 1.2 percent (1,900 fewer employees).

Graph, Total Enterprises and Total Employees.  

Revision

Some estimates of 2005 have been revised as a result of new information received. Affected were two industries, surveying services (ANZSIC code L782200) and defence (ANZSIC code M820000). More information on revisions is available upon request.

Future developments

Statistics New Zealand, in collaboration with Inland Revenue and the Department of Labour, has been engaged in the development of the Linked Employer-Employee Data (LEED) since 2002. The LEED project is an innovative new development integrating existing employer and employee information to provide new insights into the operation of the labour market and its relationship to business performance. LEED draws on existing administrative data sourced from the taxation system, together with business data from Statistics New Zealand's Business Frame. LEED is created by linking a longitudinal employer series from the Business Frame to a longitudinal series of Employer Monthly Schedule payroll data drawn from Inland Revenue. The first official release of LEED statistics was in February 2006.

The longitudinal employer series (or longitudinal Business Frame) attempts to identify births and deaths of enterprises solely due to administrative churn (such as company restructuring and changes of ownership). This allows genuine business start-ups and closures to be identified. A project looking into the feasibility of producing a new range of business population statistics from the longitudinal Business Frame resulted in the publication of an experimental series in May 2006. The Business Demographic Statistics Review Report is available from Statistic New Zealand's website. The first official release of business population statistics based on the longitudinal Business Frame is expected in October 2007.

For technical information contact:
Trudy Grienauer or Litia Tapu
Christchurch 03 964 8700
Email: info@stats.govt.n

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